China warns U.S. about debt default

Oct. 7, 2013
|

Newly redesigned $100 notes. / Mark Wilson, Getty Images

by David Jackson, USA TODAY

by David Jackson, USA TODAY

One of the United States' biggest creditors is expressing worry about a potential debt default.

China.

The United States is on the verge of breaching its debt ceiling, and Chinese Vice Finance Minister Zhu Guangyao said his government is "naturally concerned about developments."

It is China's first public comment on the Oct. 17 deadline for raising the debt ceiling.

American and Chinese officials have discussed the issue, Zhu said, and "the United States is totally clear about China's concerns."

Also from Zhu: "We ask that the United States earnestly takes steps to resolve in a timely way before Oct. 17 the political (issues) around the debt ceiling and prevent a U.S. debt default to ensure safety of Chinese investments in the United States and the global economic recovery. ... This is the United States' responsibility."

"The U.S. government moved into the second week of a shutdown on Monday with no end in sight, as Congress also confronted an October 17 deadline on raising the debt ceiling.

"'We hope the United States fully understands the lessons of history,' Zhu said, referring to a deadlock in 2011 that led to a downgrade of the U.S. credit rating to "AA+" from "AAA" by agency Standard & Poors.

"The last big confrontation over the debt ceiling, in August 2011, ended with an eleventh-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if a default were allowed to happen."